Washington and the Deficit

So, here we are with Republican controlled executive and legislative branches. One would assume, based on traditional conservative philosophy, that spending would be down, taxes would be cut, and perhaps some programs would be impacted. Well, you'd only be partially correct. Tax cuts are occurring, some programs are seeing funding cuts, yet spending is going through the roof. Simple logic tells you this isn't sustainable. Business Week had a wonderful article on the topic titled "Washington's Deficit Plan? Nada."

What this means is that a significant portion of our spending is going towards the military. Luckily, we've all forgotten that the war was based on weapons of mass destruction. Yes, I know, there was bipartisan approval. Of course, that was based on certain conditions that were never met. Luckily, things have turned around a bit there, with road bumps. However, history tells us that a prolonged military presence is the only way that it will be successful over the long run. The United States is good at fighting, always has been, but not so great at peacekeeping.

So, military spending will continue to go through the roof. Healthcare spending is ludicrous and not being attended to, and programs that meet the needs of Americans will continue to be slashed. Oh yes, and tax cuts will occur on the national level, the debt will balloon, while the extra burden will be passed down to state governments (who will then, of course, raise taxes). This won't change, because officials can't raise taxes, it's political suicide. So, that would mean military spending would have to decrease (can't happen), the estate tax cut promise would have to be axed (won't happen), or serious reform would have to occur elsewhere (no signs of this occurring).

What this means is that we'll continue to be dependent on foreign sources of cash, such as China. This reduces our ability to deal with them on issues such as fair trade. Especially because, with such a significant deficit, inflation is likely, reducing the attractiveness of the dollar to more traditional sources. No one wants to invest in a currency that is sliding (where was the dollar versus the Euro, where is it now?). So, in conclusion, program cuts are occurring, spending is increasing, the economy is showing little sign of real growth, and the dollar is sliding. Sigh, it's par for the course it seems.